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Confronting Challenges in the Legal Ecosystem

Editor’s Note: The author of this post is CEO of a strategic consulting firm, and helped ULX refine the program that is the subject of the post below.

By Mark A. Cohen, Chief Executive Officer and Founder, Legalmosaic

During the past year, I have consulted with the global legal services company UnitedLex and, as such, am familiar with and have offered counsel on its Legal Residency Program. We believe that it addresses a number of challenges confronting each element in the legal ecosystem, something that has been addressed frequently but on a compartmental rather than holistic basis.

Law schools are under attack; law firms and legal providers are in a cutthroat marketplace where previously unheard of “discounts” have become the norm, not the exception; and legal consumers (clients) are, themselves, under great pressure to cut legal costs while, at the same time, mitigate risk.  These issues are all inter-related and require collaboration between and among these three stakeholder groups to achieve better outcomes.

But collaboration is not an element in traditional legal teaching or practice models.  The adversarial nature of legal practice, the “lawyer versus non-lawyer” distinction drawn by legal ethics Rules, and the traditional profit-per-partner driven law firm model which often spawns internecine squabbles all militate against collaboration.

Law is not a zero-sum game, nor is it inherently retardant to collaboration even if most lawyers presently operate as if it is.  Every other knowledge-based service profession except lawyers has collaboration baked into its DNA.  And it’s the same for the businesses who are lawyers’ clients.  What’s wrong? The legal vertical suffers from a fundamental misalignment of interest between and among its key stakeholders.  This makes collaboration an imperative, not an aspiration.

At the core of each legal stakeholder’s challenges are two things: (1) an unsustainable model; and (2) an erosion of trust in the other stakeholders.  So, when those interests are aligned and legal stakeholders collaborate in action rather than precatory word, that’s a story worth telling.  This is such a story.

UnitedLex, referred to throughout as ULX, is an institution backed U.S.-based global legal services company that employs approximately 1,600 U.S. attorneys as well as 500 or so additional professional staff including engineers, cyber-security experts, technologists, and project managers (some of whom are also attorneys).  The company has channeled the Accenture model of efficiency, process and project management, domain expertise, and global imprint, focusing on key emerging cost/exposure areas that law firms do not typically handle or excel at.  ULX’s suite of services includes: data management (particularly e-discovery), cyber-security, IP (basic functions and monetization, not patent applications), and immigration.  The company has an impressive roster of Fortune and Global 500 clients for whom it performs some or all of these services, utilizing its proprietary technology, geographical breadth, infrastructure, and deep domain expertise to drive client value.  It also provides “solution center” support to several AmLaw 100  firms, delivering rebranded, comprehensive back-end infrastructure services that reduce client risk, shave off millions in costs, and enable the law firm to retain client control, take a slice of the fee, as well as to achieve market differentiation.

The ULX Legal Residency Program

ULX has recently extended its collaborative hand to law schools, teaming with an initial group of four highly regarded institutions across the country (Emory, Vanderbilt, University of Miami, and Ohio State), to provide post-graduation jobs, training, and critical contemporary practice and leadership skills for more than 100 of their law graduates.  Each partnership between UnitedLex and the law school works the same way: ULX and the school agree to create a “legal residency program” populated by graduating students (Bar licensure is required) who serve a two year hitch working for and training under ULX.

The program channels medical residency where young doctors receive intensive clinical training from experienced physicians and “learn the ropes” of clinical practice and patient care. ULX legal residents are paid between $55K-$70K (overtime and other variables account for the spread) receiving rigorous training, then engaging in client work under the supervision of ULX’s senior lawyers.  The training and work focus on: litigation management, e-discovery, cyber-security, technology, patent licensing, intellectual property management and immigration law.  Senior attorneys from ULX as well as faculty from the participating law schools provide the training.  The law schools socialize the program to their donor base; this “marketing” is intended to generate new ULX business opportunities for which the law school is compensated.  The bulk of the law school’s revenue funds scholarships and defrays tuition costs.

The law schools socialize the program to their donor base; this “marketing” is intended to generate new ULX business opportunities for which the law school is compensated.

The Misaligned Interests of Legal Stakeholders

The legal vertical is experiencing stress at all levels, and the cracks are structural.

  • Law students face an unholy Trinity of problems: (1) crushing debt from the high cost of their education (the average law student graduates with six-figure debt from law school alone); (2) a harsh job market; and (3) lack of “practice ready” skills upon graduation and licensure.
  • Law schools are confronting: (1) dramatic declines in applicants; (2) intense fiscal pressure — once profit centers, they are now supplicants of their parent University; and (3) a growing consensus that material curriculum reform, particularly more practicum training, is necessary.
  • Legal providers face: (1) intense competition, including new entrants into the marketplace, global competition, a decline in outsourced work and corresponding increase in “in-sourced” work now handled by in-house legal departments; (2) price compression; (3) expanded disaggregation of “legal” work and the growth of legal products fueled by technology; (4) an explosion of firm mergers and lateral movement (“survival of the fittest”; “too big to fail”); and (5) client demand for greater value.
  • Clients grapple with: (1) pressure to reduce legal spend; (2) risk mitigation pressure when new mega-threats such as cyber-security and increased regulatory challenges have arisen; (3) globalization which, coupled with existing domestic regulatory challenges, adds complexity, legal cost and enormous exposure; and (4) legal issues are part of larger business challenges (data breaches, geopolitical events, etc.) that demand inter-disciplinary responses.

Expanding the ULX Legal Residency

https://www.flickr.com/photos/carbonnyc/2104692366/in/photolist-4cZ6Hq-bWVHqj-72np8J-zUxoU-Lq6wb-4fAUu4-74cTnV-ePFzc7-bBsW9y-bQnB1B-8PzgMF-8Pzhca-9jd3im-7ftfq-irb9x9-Q29zG-Q2EiK-9VBuk1-9VyD7k-9VBu8E-Q29w5-9VyB9B-9VBsNb-9VBuDC-6sgHUz-juCqy-Q2Ebg-Q2EcM-Q29xd-Q2EdD-Q29yj-Q29u5-Q2Ef2-6mdJL-9ihZfq-bn3QoC-4g1GKx-5jjmL-5gSzx-qhKjW9-8DbDhL-dw3gk-ipmJQj-5c9mLp-6qZBX6-cqFMY-6r4RBu-6qZAc8-9uNGP-5gSH8

Photo by David Goehring (Flickr/Creative Commons)

ULX is in discussions with a number of additional leading law schools based upon its success with the initial group of four. Academy interest has also been stoked by a growing recognition that even elite law schools must be more attuned to developments in the legal marketplace and, more particularly, the erosion of BigLaw’s lure as the default career path for the bulk of their graduates.  This means, among other things, honing new skills for students that are central to contemporary legal delivery and at the heart of the ULX Residency Program.

Here is the ROI for each stakeholder in the ULX Legal Residency Program:

  • Law Students: (1) a solid paying job; (2) excellent post-graduate practicum training from leading practitioners, including extensive work on client matters; (3) an intense exposure to emerging key legal practice areas that are foundational elements not only for future market-entry positions but also for leadership ones; (4) collaboration skills; (5) network creation; and (6) unique skill set and experience that qualifies residents to assume management-level positions in traditional law firms as well as in “new” legal jobs (IT, consulting, business, etc.).
  • Law Schools: (1) placement of graduates (a key component in the all-important ranking criteria that drives future applicants, funding, job placement, etc.); (2) revenue stream (ULX has already stroked six-figure checks to law school partners in consideration for facilitating new business opportunities); (3) a closer connection with the marketplace — particularly the donor base— necessary to effect meaningful curriculum reform; (4) an opportunity for graduates to be in the vanguard of new jobs being created for lawyers as well as to have graduates with better-rounded skill sets necessary for contemporary “legal practice” (which includes a wide swath of positions outside law firms); (5) outreach to their alumni/ae and donor bases that does not involve a money ask and can produce additional job opportunities; and (6) collaboration and alignment of interest with students, providers, and consumers (the Academy is integrated into the community thereby creating a “legal village”).

ULX has already stroked six-figure checks to law school partners in consideration for facilitating new business opportunities.

  • ULX: (1) an opportunity to train and recruit a top tier talent pool; (2) expand its client base; (3) create the opportunity to assume a leadership role in provider-Academy partnership while benefitting clients; (4) establish thought and “action leadership” by aligning the interests of all key legal stakeholders, demonstrating that a company need not “engage in the practice of law” to drive positive changes in its delivery as well as to effect salutary results for its various stakeholders.
  • Clients: (1) work with talented, well trained young lawyers on a cost-effective basis; (2) have access to those lawyers as potential hires upon completion of the residency; (3) an introduction to UnitedLex and its suite of services and initiatives (cost savings and risk mitigation supported by a global reach and infrastructure to scale it); (4) a direct connection to providers and the Academy to fill their needs as well as to identify and address unmet ones.

Conclusion

The implications of the ULX Legal Residency Program are enormous.  It is something much more than a successful provider’s productive collaboration with the Academy — no small thing by itself.  It is evidence of a company tangibly and successfully realigning the interests of each and every stakeholder in the legal system.  Most of all, it demonstrates that when the interests of all stakeholders in the legal village are aligned, good things happen for each of them.

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